Weekly Electronics News From R&A(1/20)

Catalog

1.?Bosch will invest over $1 billion in the production of components for electromobility in China

2.?A new milestone! Global electric vehicle market share reached 10% for the first time in 2022

3.?Demand for display driver ICs is expected to rise in 2023

4.?WULING Auto sold 1.6 million vehicles in 2022

5.?Global semiconductor revenue grew 1.1% last year

01. Bosch will invest over $1 billion in the production of components for electromobility in China

According to Bloomberg News, Bosch is spending around $1 billion(about 6.726 billion yuan) to make electric-vehicle components in China as the automotive supplier hopes to benefit from the country’s shift away from the combustion engine. Bosch said the new facility would focus on technology including silicon carbide power modules, a type of semiconductor, and integrated braking systems. The first phase of the new plant is scheduled to be completed by mid-2024.

Recently, Bosch plans to build a facility in Suzhou in Jiangsu province to develop, test and manufacture car parts and automated-driving technology mainly for local automakers.

Bosch announced that Robert Bosch Venture Capital GmbH (Bosch Venture Capital), its subsidiary, has continued to invest in China in recent years. In 2022, it will set up a venture capital fund with a total amount of about 1.7 billion yuan (250 million euros).

This Monday, Bosch Venture Capital jointly invested with Boyuan Capital, BAIC Futian, Beijing Yihuatong and Shenzhen Fuyuan Wisdom to establish Beijing Kawen New Energy Vehicle Co., Ltd..?

Comment: Founded in 1886, Bosch is a technology-based company. Automotive and intelligent transportation technology is the largest business segment of the Bosch Group. Kawen Vehicle will be committed to the research and development, production and sales of pure electric and hydrogen fuel commercial vehicles and related core components and systems. The company also plans to develop remote control and intelligent driving technologies, such as intelligent networking, smart logistics and autonomous driving.

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02. A new milestone! Global electric vehicle market share reached 10% for the first time in 2022

( IThome News on January 17) According to the latest statistics, global electric vehicle sales accounted for 10% of all new vehicle sales for the first time in 2022, up from 8.3% in 2021.

Data from LMC Automotive and EV-Volumes.com show that global electric vehicle sales accounted for 10% of global sales last year, most of which were in Europe and China. In both markets, manufacturers are focusing on electric vehicle sales and are launching a number of new models while optimizing and improving existing vehicles.

A total of 7.8 million electric vehicles were sold worldwide last year, according to the report. The continued adoption of electric vehicles not only provides consumers with new, sustainable powertrains, but also provides automakers with new revenue streams through subscription-based programs and charging infrastructure.

Electric vehicle sales are likely to grow again by 2023. A report by S&P Global Mobility, said it expects electric vehicle sales to reach 10 million units this year, accounting for 14% of all new vehicle sales for the year.

In addition, the report said the United States is not as keen on electric vehicles as other markets, but overall sales of electric vehicles have grown. Other figures show that U.S. automakers sold 807,180 electric vehicles last year, up 2.6% from the previous year. The report says electric vehicles will account for 5.8% of all U.S. vehicle sales in 2022.

Comment: In the short term, the greatest obstacles to continued strong EV sales are soaring prices for some critical minerals essential for battery manufacturing, as well as supply chain disruptions. In the longer term, greater efforts are needed to roll out enough charging infrastructure to service the expected growth in electric car sales.

03. Demand for display driver ICs is expected to rise in 2023

According to TrendForce’s analysis of the supply chain for display panels, demand slowed dramatically in 2Q22 and thereby caused inventory levels to rise sharply for display driver ICs (DDIs) within a short period.

However, the market for DDIs is in a notably better state now in 1Q23 following two to three-quarters of price decline, reduction in wafer input, and inventory consumption. Moreover, the first quarter is the critical period when DDI suppliers set their wafer input quantities. In order to effectively meet the demand for 2H23, DDI suppliers will need to finish arranging orders with their foundry partners by the end of 1Q23.

TrendForce believes that since panel prices have pretty much hit the bottom, the panel market as a whole will recover gradually over the quarters. Later, with the arrival of the traditional peak season in 3Q23, demand is anticipated to rise significantly in the panel market. Hence, the corresponding demand for DDIs will rebound as well.

According to TrendForce’s investigation, inventory began to surge for DDI suppliers in 2Q22, extending to more than 6 months. DDI suppliers, therefore, had to immediately revise their wafer input quantities. Working panel makers, DDI suppliers were urgently seeking a solution to clear excess inventory. Turning to foundries, DDI suppliers were scaling back wafer input. Even under the consequences of recognising their inventory losses or compensating foundries for not meeting the terms of their long-term agreements, DDI suppliers were steadfast in reducing their existing stocks so as to minimise the impact of the rapidly deteriorating market situation.

Regarding the general price trend of DDIs, it was on a slide through 2022. The cost pressure on DDI suppliers had been very heavy due to two major factors. First, foundries had earlier raised wafer prices in response to the pandemic-related?chip?shortage. Second, the demand freeze in 2Q22 caused an inventory pile-up. Despite this strong cost pressure, DDI suppliers were compelled to slash prices because of the massive demand correction and the collapse of panel prices. Hence, prices of DDIs fell by 5~10% for every quarter of 2022. Currently, prices of DDIs have returned to almost the level where they began their pandemic-induced rally in 2020. Apart from this, the gross margin has also shrunk considerably for DDIs. In this situation, most DDI suppliers are still compelled to cut prices further even if their foundry partners opt to not make significant concessions on wafer quotes. In order to capture a steady flow of demand over the long run, DDI suppliers might even offer quotes that are below the market average for some transactions. On the other hand, the erosion of gross margin has become notable, so there is a limit to how far prices can go down.

Comment: The lead time for DDI orders can extend to around three months. To meet panel makers’ demand for particular quarter, a DDI supplier will have to be ready to make the corresponding wafer input no later than at the start of the quarter before.Hence, a sudden shift in supply-demand dynamics is a potential issue that warrants consideration. Presently, DDI suppliers are sticking with a conservative wafer input plan because they still want to further lower their inventories.

04. WULING Auto sold 1.6 million vehicles in 2022

On?On January 17,?WULING, Chinese auto company, revealed the sum sales of 1.6 million vehicles during 2022, new energy cars with shipments of 600 thousand units growing 33% year on year.Wuling Hongguang MINIEV as a leading in the battery electric vehicle market throughout the year, was shipped more than 550,000 units, and took the lead in the Chinese brand pure electric vehicle sales for 28 months in a row. Wuling Star Hybrid Edition stayed the top sales in the independent market. In the terms of commercial vehicles, Wuling micro-van and Hongguang vehicles maintain a high market share with absolute advantages.In addition, the export of Wuling performed well, remaining rapid growth for 7 consecutive years,with the total export of 193,579 vehicles, a year-on-year growth of 33%; The sales in?Mexico, the core overseas market, rose by 206% year on year. In 2022, its subsidiary in Indonesia sold 30,037 cars in total. The sales of Wuling New Energy car Airev, which was just listed in Indonesia, exceeded 8,000 units.

Comment: Wuling brand vehicles benefit from low pricing and good reputation, in the segment to occupy a significant advantage. Hongguang S, Hongguang V and Jiachen which are the typical models of Wuling ranks 1st, 4th and 8th with sales of 13.16, 737 and 34,700 units, respectively.

05. Global semiconductor revenue grew 1.1% last year

Global semiconductor revenue increased by only 1.1% in 2022 to total $601.7 billion, up from $595 billion in 2021, according to a report by analyst firm Gartner published on Tuesday.

In the latest report published on Tuesday, Gartner said, the combined revenue of the top 25 semiconductor vendors increased 2.8% in 2022 and accounted for 77.5% of the market.“2022 began with many semiconductor devices in shortage resulting in extended lead times and increasing pricing which led to reduced electronic equipment production for many end markets,” said Andrew Norwood, VP Analyst at Gartner.

The slump in needs for PC and smartphones is attributed to reduction of individual spending. The sluggish demand causes a cut in enterprises expenditure to deal with?the global economic recession.The above domino effect dominates the growth of semiconductor industry.

Samsung Electronics retained the top spot, despite revenue falling 10.4% in 2022, primarily due to declines in memory and NAND flash sales, according to the report. Intel held on to the second position with a 9.7% market share. However, the company was impacted by the significant decline of the consumer PC market and strong competition in its core x86 processor businesses and revenue growth declined by 19.5%. Qualcomm and Micron Technology switched places in the rankings, while AMD jumped from 10th to seventh. Mediatek fell to number 9 from seventh last year.

Comment: Moreover, memory chip market - largely defined by dynamic RAM (DRAM) and NAND flash - which accounted for approximately 25% of semiconductor sales in 2022, was the worst-performing device category, experiencing a 10% revenue decrease. Overall non-memory chips revenue increased by 5.3%-analog devices by 19%,?discrete components by 15%.

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